Main menu

Submenu

Breadcrumb

Sleight of Hand-Out

My good friend and close colleague Gabriel Rossman elegantly analyzes an important phenomenon: exchanges that the parties represent as structured in one way, although the exchange could readily be understand as “really” structured in another way. He focuses on transactions that appear to be innocent but that participants, observers, jurists, critics, enemies, or social scientists may construe as “actually” market exchanges that are (ideally, explicitly) illegitimate in the culture in which they occur. His analyses are perceptive, and I find them both accurate and illuminating. In my response, first I want to characterize the four fundamental structures of social relations that people are employing when they obfuscate – and the rest of the time, too, when they act straightforwardly. Then I want to argue that the kinds of obfuscation that Gabriel discusses are special cases of a more general pattern: people often pretend that they are interacting according to one relational structure when in fact their action is organized according to another type of relationship. For example, in the converse of what Gabriel describes, people may purport to engage in market exchange when they actually intend or perceive the relationship to be something else. Third, I want to argue that what Gabriel says about material exchange is true of all sorts of social relationships, including, for example, decisionmaking, social influence, the organization of work, relational interpretations of misfortune, and so on. Fourth and finally, I want to suggest that the obfuscations Gabriel illuminates are cases of a very broad pattern of intentional ambiguity, including practices in which no one intends to mislead anyone, but instead one or more parties want to preserve the advantages and options available in two different forms of relationships simultaneously.

The Four Fundamental Forms of Social Relations

First, the cases that Gabriel illuminates are instances where one party aims to conduct a transaction based on the value of one commodity computed as a ratio of the value of another commodity. This is market pricing, one of the four fundamental relational models for social coordination: interactions structured according to a ratio, rate, or proportion (whether monetary or not – consider punishment proportional to the crime, or the ratio-scale measurement required by utilitarian morality).[i] When cultural rules proscribe using market pricing in a given domain, people may get around this by using one or a combination of the other three fundamental relational models – depending on which are legitimate. For example, people often obfuscate by using communal sharing, in which participants treat each other as equivalent for the purpose of the interaction. Thus with regard to material possessions, what’s mine is yours, so I give you gifts or we simply take what we need or want (think of a loving family, a platoon of soldiers in combat, or simply people sharing a park). Another basic relational model is authority ranking, in which people put themselves in a linear order of prerogatives and responsibilities: subordinates owe respect and deference to those above, while superiors owe guidance and protection to those below (think of military systems, bureaucracies, or seniority systems). The fourth elementary relational model is equality matching, in which people keep track of the additive differences among them, with reference to even balance (think of taking turns, tit-for-tat, equal distribution, a fair lottery, or counting votes).

The relational model that people use in any given domain of interaction varies greatly across cultures. But people are very committed to using the culturally correct relational model for the circumstances, and often they get quite confused or angry when others use the wrong one – use of the wrong relational model makes social coordination impossible.[ii]

It Goes Every Which Way

Gabriel focuses on the fact that illegitimate market pricing relationships are often disguised as communal sharing, while pointing out that bundling sometimes involves substituting a legitimate market pricing interaction (at a biased price) for an illegitimate one. But that’s not all: when any of the four elementary types of relationship are illegitimate, they may be disguised as any of the other ones that are acceptable. For example, if nepotism – communal sharing – is illegitimate, people may disguise the transaction as a valid case of awarding the contract to the lowest bidder in the framework of market pricing. If market pricing is prescribed, people may pretend to perform it while actually using authority ranking (giving freebies or discounts to clients or superiors), or using communal sharing (not collecting tolls or tariffs from family and friends). A judge or inspector may pretend to enact her nominal authority ranking role, while actually reducing penal sentences or fines imposed on people with whom she has a communal sharing relationship.

This brings me to my third major point, which is that disguising an interaction in one relational model as an interaction in another relational model is by no means limited to material transactions. A professor leading her lab or seminar may pretend that the participants are all operating according to communal sharing, with everyone contributing to the shared goal of discerning the truth – but she, and perhaps everyone, may consciously or unconsciously know that the discussion is ultimately governed by her prestige and expertise in an authority ranking framework. Likewise, what is nominally represented as an authority ranking and market pricing relationship between boss and employee may actually be an illegitimate communal sharing relationship between lovers.

No Fooling

My final point is that people often nominally represent one of the four fundamental types of interaction as another, but without intending to mislead anyone, even themselves. Polite pretense greases the wheels of social interaction. A superior may make a ‘request’ to a subordinate that has the force of an order, but is phrased as if they were friends. People often buy coffee for friends, invite them for dinner, or do them a favor as if these were gifts in a communal sharing relationship; the donor might even protest if the recipient declared an obligation to reciprocate in kind. But the donor really does expect a matching counter gift to balance the equality matching relationship – and both of them fully understand that. Furthermore, people often use indirect speech to preserve the options or the benefits of two different types of relationships at the same time – for example, when offering a bribe in a deniable way. [iii] In other cases, dissimulation may be simple politeness, graciously making everyone comfortable by allowing them all to perform their courteous parts in a game that everyone understands they are all playing. At the other extreme are the con and the scam.

Obfuscation of the type that Rossman analyzes depends on plausible deniability: on the absence of explicit common knowledge – though in practice everyone may know what is happening and believe that many others presumably do. But social life involves many different degrees and forms of pretense: aiming to fool no one but simply be polite, aiming to fool everyone, aiming to fool the public but not insiders, aiming to fool only a victim, or truly hiding what one is doing even from oneself. And quite often, there’s no fooling, but simple unconsciousness. Without any intent to hide anything or mislead anyone, to a large degree people are simply unaware of how their own social minds work and don’t know what they are really doing.

Notes

[i] Fiske, Alan P. 1991. Structures of Social Life: The Four Elementary Forms of Human Relations. New York: Free Press.

Fiske, Alan P. 1992. The Four Elementary Forms of Sociality: Framework For a Unified Theory of Social Relations. Psychological Review 99:689-723.

Also from this issue

Lead Essay

In nearly all cases, markets are how most of us obtain and provide goods and services. But in some situations, recourse to markets is disfavored - whether rightly or wrongly - and in those cases, participants sometimes resort to what is known as an obfuscated exchange: Transactions may occur in which the good or service is provided, and in which the provider is compensated, but the whole thing still looks much less like a market transaction than it otherwise might. Examples are many, including everything from radio payola to Islamic finance. Professor Gabriel Rossman offers an introduction to this fascinating world and speculates on how cultures overcome their scruples about using markets.

Response Essays

Michael C. Munger notes that objections to exchange typically arise from the perception of unequal bargaining power; these perceptions commonly are the source of the need to obfuscate. And yet obfuscation increases transaction costs. Even in the case of government subsidies to industry, obfuscation plays exactly this role, for we would perhaps find direct cash transfers even more objectionable than indirect, regulatory subsidies, which are not so easily talked about as just a sop to a favored few. But this is hardly the only time when obfuscation happens, and Munger concludes by promising to examine in a later essay when hidden exchanges should and should not be recommended.

The examples that Gabriel Rossman analyzes are special cases of a general pattern, says Alan Page Fiske: What people say about social relationships commonly diverges from the actual nature of the relationship. This is not limited to obfuscation of market behavior; other things sometimes masquerade as commercial transactions instead, and various types of non-commercial interactions masquerade as one another. Further, individuals commonly act to preserve a beneficial ambiguity in their social relations, seeking to retain a pattern of options that would be foreclosed by a strict definition of the nature of their relationships. And at times, we may even be personally unaware of what our social minds are doing - and mischaracterize a relationship without realizing it.

Alex Tabarrok notes that for evolutionary reasons, humans tend to think in wealth-destroying ways about certain types of exchange. Obfuscation can help us work around the constraints of our lizard brains, saving lives in the process. Such happens in the obfuscated markets for organs in Iran and Israel. But obfuscation can do more than that: It can also allow participants to preserve certain kinds of social status that they might not want to forego. Obfuscation, then, is not mere dishonesty. It’s a way of negotiating social hierarchies while also participating in a market.

Disclaimer

Cato Unbound is a forum for the discussion of diverse and often controversial ideas and opinions. The views expressed on the website belong to their authors alone and do not necessarily reflect the views of the staff or supporters of the Cato Institute.